Report on the sustainability of the scheme
1 July 2013 to 31 December 2014
February 2015
Prepared by the Scheme Actuary
Introduction
This report presents analysis on the scheme experience to 31 December 2014 for the seven
NDIS trial sites, including:

Participant satisfaction. Participant satisfaction remains high. On a scale of very poor (-2)
to very good (+2), with neutral being 0, participant satisfaction is at 1.67.

Participant numbers. 13,646 participants were eligible for the scheme (almost 100%
compared with the bilateral target). This is an increase of 2,707 participants over the
quarter. 11,029 participants had an approved plan (81% compared with the bilateral target),
which is an increase of 2,149 participants over the quarter.

Total scheme costs. Considering the number of participants who have entered the
scheme and distribution of packages committed to these participants, the scheme is within
the full scheme funding envelope.
The report also includes information on:

The amount of support committed to participants, including trends, the distribution of
packages committed to participants, and actual payments made to date.

Continuous improvement to the scheme to ensure scheme sustainability, including the
development of references packages and an outcomes framework.
It is important to note that it is early stages in the roll out of the NDIS. Scheme experience will
emerge over time and allow more thorough analysis of financial sustainability.
2
Scheme experience (1 July 2013 to 31 December 2014)
Participant satisfaction
Participant satisfaction with the Agency has remained very high in recent months. Satisfaction
is reported on a scale of very poor (-2) to very good (+2), with neutral being 0. The participant
satisfaction level is currently 1.67, consistent with the September results.
Participants
As at the 31 December 2014 (Table 1):

13,646 participants were eligible for the scheme (almost 100% of the bilateral target). This
is an increase of 2,707 participants since 30 September 2014.

11,029 participants had an approved plan (81% of the bilateral target). This is an increase
of 2,149 participants since 30 September 2014.

The number of participants relative to the bilateral agreements is higher compared with the
end of September results (100% compared with 95%), and the number of participants with
approved plans relative to the bilateral agreements is also higher compared with the end of
September results (81% compared with 77%).

The actuarial baseline model used a different methodology to determine the likely number
of participants in each trial site. This analysis resulted in different estimates to the bilateral
agreements. The number of participants in the scheme to date compared with the actuarial
baseline model is included in Appendix A. As the trial sites were resourced in line with the
bilateral agreements, the estimated number of participants in the actuarial model is difficult
to achieve.
Table 1 Eligible participants and participants with approved plans
1 July 2013 to 31 December 2014
NSW
SA
TAS
VIC
ACT
NT
WA
Total
4,015
3,127
849
4,448
472
150
622
13,683
3,607
3,636
970
4,099
660
46
628
13,646
90%
116%
114%
92%
140%
31%
101%
100%
Number of participants with current
approved plans (active & inactive
participants)
3,020
2,439
882
3,710
434
42
502
11,029
Percentage with approved plans
compared with expected
75%
78%
104%
83%
92%
28%
81%
81%
Number of expected participants
(bilateral agreements)
Number of participants (active &
inactive participants)
Percentage deemed eligible compared
with expected
3
Trends in plan approvals
For trial sites that commenced on 1 July 2013 the number of participants receiving their first
approved plan was lower in the December quarter compared with the September quarter
across all trial sites with the exception of South Australia. Some of this decrease is due to the
workload associated with plan reviews, and also in part to phasing schedules in the bilateral
agreements (Figure 1).
In the December 2014 quarter, plan reviews represented more than half of plans approved in
the New South Wales, Victorian and Tasmanian trial sites (58%, 63% and 78% respectively),
whilst in the South Australian trial site only 35% of plan approvals were plan reviews.
For the new trial sites in 2014/15 there have been an increasing number of plan approvals from
month to month, with the exception of the Northern Territory trial site. Note: the Northern
Territory and Western Australian trial sites did not schedule any plans approvals in the first
month of operations (Figure 2).
4
Figure 1 Participants with approved plans by month compared with the bilateral agreements and the actuarial model – NSW, SA, TAS and VIC trial
sites
SA
600
500
500
400
400
Plans
Plans
NSW
600
300
300
200
200
100
100
0
0
Month of approval
Month of approval
Actual - first plan
Actual - plan review
Actual - first plan
Actual - plan review
Expected (bilaterals)
Expected (actuarial model)
Expected (bilaterals)
Expected (actuarial model)
VIC
600
500
500
400
400
Plans
Plans
TAS
600
300
300
200
200
100
100
0
0
Month of approval
Month of approval
Actual - first plan
Actual - plan review
Actual - first plan
Actual - plan review
Expected (bilaterals)
Expected (actuarial model)
Expected (bilaterals)
Expected (actuarial model)
5
Figure 2 Participants with approved plans by month compared with the bilateral agreements and the actuarial model – ACT, NT and WA trial sites
NT
200
180
180
160
160
140
140
120
120
Plans
Plans
ACT
200
100
100
80
80
60
60
40
40
20
20
0
0
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Month of first approval
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Month of first approval
Actual - first plan
Actual - plan review
Actual - first plan
Actual - plan review
Expected (bilaterals)
Expected (actuarial model)
Expected (bilaterals)
Expected (actuarial model)
WA
200
180
160
Plans
140
120
100
80
60
40
20
0
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Month of first approval
Actual - first plan
Actual - plan review
Expected (bilaterals)
Expected (actuarial model)
6
Committed support and actual payments
As at 31 December 2014, 11,029 participants (active and inactive) have approved plans, and
$565.3 million of support has been committed to these participants (
7
Table 2).
Of this $565.3 million:

It is estimated that $139.6 million (25%) was committed to be provided in 2013/14
(including actual paid to date). The funding envelope based on the bilateral agreements
for 2013/14 is $148.8 million, including cash and in-kind. Hence, for participants who
have entered the scheme in the first year, committed support for 2013/14 is around 94%
of the funding envelope (
8


Table 2).1
$360.4 million (64%) is estimated to be provided in 2014/15. This compares with the
funding envelope based on the bilateral agreements for 2014/15 of $456.9 million,
including both cash and in-kind. Therefore, for participants who have entered the
scheme to date, committed supports for 2014/15 is around 79% of the funding envelope
for 2014/15 (
1
Note that the amount of committed supports expected to be provided in 2013/14 has increased since
the end of June 2014. The main reasons for this increase include correction of errors in funded
supports entered into Siebel, funded supports being added and quotes from providers being received
and updated in plans.
9

Table 2). Note: a very large proportion of the committed supports for 2014/15 are for
participants who have entered the scheme in 2013/14. Of the $360.4 million estimated to
have been provided in 2014/15, $192.0 million (53%) is estimated to be provided over
the period 1 July 2014 to 31 December 2014.

$65.3 million (12%) is estimated to be provided in 2015/16.
Stockton (a large residence in the Hunter trial site) and Colanda (a large residence in the
Barwon trial site) impacts the funding envelope significantly – removing Stockton and
Colanda from the analysis results in committed support of $513.9 million (a reduction of
$51.4 million) of which $132.1 million (26%) is expected to be paid in 2013/14.
10
Table 2 Committed support to date and amount committed to be provided in 2013/14, 2014/15
and 2015/162,3
Total (excl.
large
residential
centres)
Total
Expected to be paid
($m)
2013/14
2014/15
2015/16
Total
$139.6
$360.4
$65.3
$565.3
Funding envelope for 2013/14 ($m)
Expected to be paid in 2013/14 as a proportion of
2013/14 funding envelope
$148.8
Funding envelope for 2014/15 ($m)
Expected to be paid in 2014/15 as a proportion of
2014/15 funding envelope
$456.9
25%
64%
12%
100%
$132.1
$320.2
$61.6
$513.9
26%
62%
12%
100%
$148.8
94%
89%
$456.9
79%
67%
Actual payments to service providers as at 31 December 2014 were $153.6 million, of which
$69.7 million relates to supports provided in 2013/14.4
Actual payments to date:

for supports provided in 2013/14 represent 50% of all committed supports expected to
have been provided in that year, and 58% if the additional off system in-kind payments
are included.

for all supports provided to date represent 46% of committed supports expected to have
been provided in the first eighteen months of the scheme, and 50% if the additional off
system in-kind payments for 2013/14 are included.5
2
Supported accommodation in 2013/14 was excluded from the Tasmanian estimate as this was paid
for by the Tasmanian State government.
3 State governments have not made all monthly payments.
4 An off-system reconciliation process was undertaken to date to determine the amount of in-kind
provided in 2013/14, this estimated that a further $11.7 million supports were provided in-kind in
2013/14.
5 There is a lag between when supports are provided and when the scheme actually pays service
providers for the support.
11
Trends in average package cost
The average annualised package cost across all trial sites at the end of December is
approximately $40,800 including Stockton and Colanda6, and approximately $35,300
excluding Stockton and Colanda.7 Average annualised package costs on a monthly basis
are presented in Figure 3 and Figure 4.
The average package costs for participants in the trial sites that commenced on 1 July 2014
are not representative of the overall average cost due the way that existing participants are
being brought into the scheme. In the Northern Territory in particular four participants in
shared supported accommodation with high support needs came into the scheme in
November. The average annualised package cost in the New South Wales, South
Australian, Tasmanian and Victorian trial sites is approximately $40,800 including Stockton
and Colanda, and approximately $34,700 excluding Stockton and Colanda.
Note: the benchmark average annualised package cost for 2014/15 is $36,750 reflecting the
inflation factor included in the bilateral agreements.
As noted in the September 2014 quarterly report, the phasing of participants into the scheme
affects the average annualised package cost. In particular:

A high number of shared supported accommodation participants were phased into the
Victorian trial site in May 2014. This explains the spike in May as these participants have
a relatively higher average package cost.

In New South Wales, residents of the Stockton large residence began receiving
approved plans in February. There are currently 215 Stockton residents with approved
plans and this significantly distorts average annualised package costs in this trial site. In
addition, a high number of participants in supported accommodation were phased into
the New South Wales trial site in February which is a further reason behind the spike in
February.

In the September quarter the average annualised package cost in Tasmania was high.
This is because participants who entered the scheme in early 2013/14 with existing
shared supported accommodation arrangements have had plan reviews. The supported
accommodation cost for these participants in relation to supports provided in 2013/14
was funded by the Tasmanian state government, and is now funded by the NDIS.
6
Colanda is a large residential centre in the Victorian trial site. Plans for these participants were
approved from October 2014.
7 New South Wales did not specify the average cost of providing supported accommodation in the
Stockton large residential centre and hence an estimate has been used. There were 215 Stockton
residents with approved plans at the end of December 2014.
12
Considering the December 2014 quarter specifically:

In the Victorian trial site, 73 residents of the Colanda large residence had plans approved
in October 2014 and explains the spike in October as these participants have
significantly higher average package cost.

In the December 2014 quarter, a number of shared supported accommodation
participants were phased into the New South Wales trial site.
Note: Average annualised package cost is not an appropriate measure of scheme
performance when considered in isolation from other metrics. It is important to consider the
number of scheme participants, the distribution of packages committed to these participants
and actual payments for supports provided. All of these factors contribute to the overall cost.
Further, the projections and modelling presented in this report do not use average
annualised package cost – the modelling focuses on the supports provided to a participant
over their lifetime, rather than considering annual package amounts.
13
Figure 3 Average annualised committed package cost by trial site – monthly averages8 (NSW, SA, TAS and VIC)
SA
NSW
$100,000
$100,000
$90,000
$90,000
$80,000
$80,000
$70,000
$70,000
$60,000
$60,000
$50,000
$50,000
$40,000
$40,000
$30,000
$30,000
$20,000
$20,000
$10,000
$10,000
$0
$0
First approval of the latest plan
First approval of the latest plan
NSW (excl. Stockton large residential centre)
Average annualised committed supports
NSW (incl. Stockton large residential centre)
Expected annualised average cost including capital
Expected annualised average cost including capital
TAS
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
VIC
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
First approval of the latest plan
Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
First approval of the latest plan
Average annualised committed supports
Average annualised committed supports (excl. Colanda)
Expected annualised average cost excluding capital (adult rate)
Average annualised committed supports (incl. Colanda)
Expected annualised average cost including capital
8
For Tasmania the average annualised committed supports include supported accommodation costs from 1 July 2014 onwards, as the cost of supported
accommodation was funded by the Tasmanian state government in 2013/14.
14
Figure 4 Average annualised committed package cost by trial site – monthly averages (ACT, NT and WA)
NT
ACT
$90,000
$200,000
$80,000
$180,000
$160,000
$70,000
$140,000
$60,000
$120,000
$50,000
$100,000
$40,000
$80,000
$30,000
$60,000
$20,000
$40,000
$10,000
$20,000
$0
$0
Jul-14
Aug-14
Sep-14
Oct-14
First approval of the latest plan
Nov-14
Dec-14
Jul-14
Aug-14
Sep-14
Oct-14
First approval of the latest plan
Nov-14
Average annualised committed supports
Average annualised committed supports
Expected annualised average cost including capital
Expected annualised average cost including capital
Dec-14
WA
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Jul-14
Aug-14
Sep-14
Oct-14
First approval of the latest plan
Nov-14
Dec-14
Average annualised committed supports
Expected annualised average cost including capital
15
Distribution of package costs
Across all trial sites the distribution of support packages differed from expectations (Figure 5
and Figure 6). In particular, a higher proportion of low cost participants were expected
compared with actual experience, and there is a higher proportion of participants receiving
mid-range packages than expected. This is consistent across all trial sites with the exception
of the Australian Capital Territory trial site, which is affected significantly by the phasing
schedule.
The shape of this distribution, and particularly the lower proportion of low cost participants,
explains why the actual number of participants is somewhat lower than the actuarial
projections, which expected a higher number of low cost participants in line with the
Productivity Commission model.
16
Figure 5 Distribution of package costs by trial site – NSW, SA, TAS and VIC trial sites
80%
1,500
60%
1,000
40%
500
20%
0
Number of participants
2,000
Distribution
2,500
100%
2,000
80%
1,500
60%
1,000
40%
500
20%
0%
0
0%
Annualised committed support band
NSW Actual #
Expected #
Expected %
Annualised committed support band
SA Actual #
NSW Actual %
2,000
80%
1,500
60%
1,000
40%
500
20%
0
0%
Number of participants
100%
Expected #
SA Actual %
2,500
100%
2,000
80%
1,500
60%
1,000
40%
500
20%
0
0%
Annualised committed support band
Annualised committed support band
TAS Actual #
Expected %
VIC
2,500
Distribution
Number of participants
TAS
Expected #
Expected %
Distribution
Number of participants
100%
Distribution
SA
NSW
2,500
TAS Actual %
VIC Actual #
Expected #
Expected %
VIC Actual %
17
Figure 6 Distribution of package costs by trial site – ACT, NT and WA trial sites
80%
150
60%
100
40%
50
20%
0
0%
Number of participants
200
Distribution
Number of participants
100%
250
100%
200
80%
150
60%
100
40%
50
20%
0
0%
Annualised committed support band
Annualised committed support band
ACT Actual #
Expected #
Expected %
Distribution
NT
ACT
250
NT Actual #
ACT Actual %
Expected #
Expected %
NT Actual %
100%
200
80%
150
60%
100
40%
50
20%
0
0%
Distribution
Number of participants
WA
250
Annualised committed support band
WA Actual #
Expected #
Expected %
WA Actual %
18
The distribution of cost is highly skewed towards a small number of participants with high
cost packages (Figure 7) – specifically, of the 6,366 active participants with approved plans
in the New South Wales and Victorian trial sites excluding the Stockton and Colanda large
residences, 4,301 participants have an annualised package cost of less than $30,000 (68%).
The total annualised package costs of the 4,301 participants with support packages of less
than $30,000 is $55.9 million which represents only 23% of total committed supports. On the
other hand, the total annualised package costs of the 686 participants with support packages
of more than $100,000 is $118.0 million which represents 48% of total committed supports.9
Therefore, the total cost of the scheme will be driven by the relatively few participants with
high cost plans.
9
Stockton is a large residence in the Hunter trial site. This is a high concentration of high cost people
in one geographical area. For this reason Stockton has been excluded from this analysis.
NSW (excl. Stockton)
$90,000,000
1,800
$80,000,000
1,600
$70,000,000
1,400
$60,000,000
1,200
$50,000,000
1,000
$40,000,000
800
$30,000,000
600
$20,000,000
400
$10,000,000
200
$0
Number of participants
Annualised committed support amount ($)
Figure 7 Total package costs and number of participants by trial site and annualised
committed support band
0
Annualised committed support band
Expected ($)
Actual (participants)
Expected (participants)
VIC (excl. Colanda)
$90,000,000
1,800
$80,000,000
1,600
$70,000,000
1,400
$60,000,000
1,200
$50,000,000
1,000
$40,000,000
800
$30,000,000
600
$20,000,000
400
$10,000,000
200
$0
Number of participants
Annualised committed support amount ($)
Actual ($)
0
Annualised committed support band
Actual ($)
Expected ($)
Actual (participants)
Expected (participants)
20
Continuous improvement
The National Disability Insurance Agency continues to improve the scheme in response to
scheme experience. This aims to ensure that the objectives of the scheme are being met for
participants, and the scheme remains financially sustainable.
Two pieces of work that will continue to assist with achieving participant outcomes and
financial sustainability are the development of the references packages and the development
of an outcomes framework.
References packages
Reference packages are being developed to assist with detailed monitoring of scheme
experience, including analysis of potential cost drivers. Reference packages aim to provide
an annual benchmark funding level of support for participants with similar support needs and
characteristics. Reference packages also allow a referential link between resource allocation
to individual participants (that is, the amount of funded support provided to each individual
participant) and the overall funding envelope.
Reference packages are being piloted in trial sites from February 2015.
Note: the reference package is not a benchmark used to determine the support a participant
receives, but rather allows detailed monitoring to be undertaken.
Outcomes framework
Work is currently underway to develop an outcomes framework for measuring participant
and family outcomes. The development of this outcomes framework considers how
outcomes can be measured at the scheme level as well as the individual level.
The development of this framework has involved consideration of a number of domestic and
international frameworks, and has included consultations with a range of experts and
stakeholders, including the Independent Advisory Council.
Once finalised, this framework will include eight participant domains – choice and control,
daily activities, relationships, home, health and wellbeing, lifelong learning, work, and social,
community & civic participation – as well as outcomes related specifically to families.
The outcomes framework is being piloted in the first three months of 2015.
21
Appendix A
This appendix provides a comparison of the number of participants in the scheme to date
compared with the actuarial baseline model.
Table A.1 Participants compared with the actuarial baseline model
1 July 2013 to 31 December 2014
Number of expected participants
(bilateral agreements) - (a)
Number of expected participants
(actuarial model) - (b)
Number of participants (active &
inactive participants)
Percentage deemed eligible compared
with expected - (a)
Percentage deemed eligible compared
with expected - (b)
Number of participants with current
approved plans (active & inactive
participants)
Percentage with approved plans
compared with expected - (a)
Percentage with approved plans
compared with expected - (b)
NSW
SA
TAS
VIC
ACT
NT
WA
Total
4,015
3,127
849
4,448
472
150
622
13,683
4,015
6,215
941
5,001
540
150
487
17,349
3,607
3,636
970
4,099
660
46
628
13,646
90%
116% 114%
92%
140% 31% 101%
100%
90%
59%
103%
82%
122% 31% 129%
79%
3,020
2,439
882
3,710
434
42
502
11,029
75%
78%
104%
83%
92%
28%
81%
81%
75%
39%
94%
74%
80%
28% 103%
64%
22